Annual Report BNP Paribas Cardif Levensverzekeringen NV 2017
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ANNUALAnnual Report REPORT 2017 2017 BNP Paribas Cardif SchadeveSchadeverrrrzekeringenzekeringen N.V. BNP PARIBAS CARDIF LEVENSVERZEKERINGEN N.V. Index Boards, officials and external advisors ............................................................. 3 Key figures ................................................................................................................ 4 Supervisory Board’s report .................................................................................. 5 Board of Directors’ report ..................................................................................... 7 Financial statements ............................................................................................ 28 Balance sheet – Assets as at 31 December 2017 ............................................... 28 Balance sheet – Liabilities as at 31 December 2017 ......................................... 29 Profit and loss account for the year ended 31 December 2017 ..................... 30 Cash flow statement for the year ended 31 December 2017 .......................... 32 Notes to the balance sheet .................................................................................... 33 Assets as at 31 December 2017 ............................................................................ 38 Equity and liabilities as at 31 December 2017 .................................................. 40 Notes to the profit and loss account ................................................................... 49 2 Statutory appropriation of the result ................................................................. 52 Appropriation of the result 2016 .......................................................................... 52 Proposal appropriation of the result 2017 ......................................................... 52 Independent auditor’s report ............................................................................. 54 Boards, officials and external advisors Supervisory Board Mr C.P.F. De Longueville Mr R.H.A. van Vledder Mr O.J.G. Martin Ms I.P.G.M. Brekelmans Committees within this Supervisory Board as per 31-12-2017 Remuneration Committee (supervisory board members: C.P.F. De Longueville, I.P.G.M. Brekelmans) Risk Committee (supervisory board members: O.J.G. Martin, R.H.A. van Vledder) Audit Committee (supervisory board members: R.H.A. van Vledder, O.J.G. Martin) Board of Directors Mr C. de Jong Mr M.R.E. Harkema (to 1 July 2017) Mr W. Eikelboom (from 1 July 2017) Mrs M. van Zuien (from 19 May 2017) External Independent Auditor PricewaterhouseCoopers Accountants N.V. 3 Key figures In thousand euros KEY FIGURES 2013 - 2017 201720172017201620162016 201520152015 201420142014 201320132013 Gross written premiums 39.240 43.093 46.357 46.854 48.187 Net earned premiums insurer 35.831 42.499 44.491 44.970 52.078 Claim charge * (28.629) (32.633) (35.075) (38.497) (36.846) Result on investments 13.856 12.550 13.967 14.992 14.139 Operating expenses (10.093) (11.263) (13.459) (14.488) (16.290) RESULT BEFORE TAXES 10.965 11.153 9.924 6.977 13.081 Result on technical account 6.301 9.634 8.090 5.064 10.670 Result on non-technical account 1.620 1.519 1.834 1.913 2.411 RESULT BEFORE TAXES 7.921 11.153 9.924 6.977 13.081 RESULT AFTER TAXES 5.933 8.362 7.443 5.275 9.703 TOTAL EQUITY 49.643 52.073 51.154 48.985 53.413 BALANCE SHEET TOTAL 334.183 333.664 328.335 316.742 307.608 FINANCIAL INVESTMENTS For the risk of the company 131.852 132.981 132.728 130.281 135.156 For the risk of policyholders 191.176 188.485 181.469 170.258 153.514 323.028 321.466 314.197 300.539 288.670 4 TECHNICAL PROVISIONS For life insurance 89.648 89.151 91.940 93.480 93.877 For the investment risk of policyholders 191.187 188.498 181.491 170.258 153.514 Total 280.835 277.649 273.431 263.738 247.391 INSURED CAPITAL LIFE 10.098.708 10.157.110 10.868.772 10.816.495 10.335.904 NUMBER OF FTEs** 111 124 130 129 139 * Claims for the insurance company and movement technical provision insurer ** Combined average FTEs of BNP Paribas Cardif B.V., BNP Paribas Cardif Levensverzekeringen N.V. and BNP Paribas Cardif Schadeverzekeringen N.V. Supervisory Board’s report In this report, the Supervisory Board of BNP Paribas Cardif Levensverzekeringen N.V. provides the explanation of its structure and the way it supervised BNP Paribas Cardif Levensverzekeringen N.V. during 2017. (BNP Paribas Cardif Levensverzekeringen N.V. is a 100% subsidiary of BNP Paribas Cardif B.V.). Members of the Supervisory Board of BNP Paribas Cardif Levensverzekeringen N.V. The Supervisory Board consits of the following members: Mr C.P.F. de Longueville, Chairman Ms I.P.G.M. Brekelmans Mr O.J.G. Martin Mr R.H.A. van Vledder Committees within the Supervisory Board: Remuneration Committee Risk Committee Audit Committee Supervision and advice of the Supervisory Board relating to the 2017 annual financial statements The Executive Board of BNP Paribas Cardif Levensverzekeringen N.V. prepared the annual financial statements on the reporting year 2017. The Supervisory Board of BNP Paribas Cardif Levensverzekeringen N.V. adopted the annual financial statements. The General Meeting of Shareholders adopted the annual statements on the reporting year 2017. The Supervisory Board was granted discharge by the General Meeting of Shareholders for its supervisory tasks on 2017. The 2017 annual financial statements were audited by PricewaterhouseCoopers B.V. 5 In accordance with the provisions of the Articles 35 and 36 of the Articles of Association, the Supervisory Board approved the Executive Board’s proposal to have the following result distributed as a dividend: BNP Paribas Cardif Levensverzekeringen N.V.: 5.933 thousand euros. Meetings and activities of the Supervisory Board and its Committees The Supervisory Board of BNP Paribas Cardif Levensverzekeringen N.V. convened four official meetings in 2017, on: 17 February 2017 19 May 2017 6 October 2017 8 December 2017 The Committees of the Supervisory Board of BNP Paribas Cardif Levensverzekeringen N.V. convened various official meetings in 2017, on: 2 February 2017 Audit, Risk, Remuneration 11 May 2017 Audit, Risk, 22 September 2017 Audit, Risk 8 September 2017 Remuneration 24 December 2017 Audit, Risk, Remuneration A delegation of the Supervisory Board had a meeting with the Works Council of BNP Paribas Cardif Levensverzekeringen N.V. on 21 March 2017. On 8 December 2017, there was a meeting that focused on managing internal fraud risks and, in particular, the role of the Supervisory Board. This meeting took place in the context of permanent education of the Supervisory Board. In addition to the above meetings, in October 2017 the Supervisory Board convened a meeting with the Shareholder to discuss the future strategy of the company. Focus of supervision in 2017 The growth of the economy in the Netherlands continued in 2017 and it is expected that growth will further continue in future years. At the end of 2017, economic growth was 3,4% and a growth of 3,1% is expected for 2018. The main cause of this growth is the rise in house prices. Without this increase, the growth of the economy would have been approximately 25% lower. This is undoubtedly a positive development, but it also shows that the Dutch economy is highly dependent on developments in the housing market and that decreasing house prices will also have disproportionately negative effects on the economy. And an increasing demand for owner-occupied housing not only leads to higher prices, but also to scarcity on the supply side, making it more difficult for starters in the housing market to buy a house and to get financing. In 2017, the number of sold houses increased by 10% and the number of registered mortgages even increased by 15%. Unemployment figures decreased strongly in 2017 to 4,9% of the workforce. A further decrease to 3,9% in 2018 and 3,5% in 2019 is expected, which is a historically low percentage. The increase in wages, however, still lags far behind economic growth, although there are signs that this is slowly changing. The increase in the number of houses sold and new mortgages doesn’t render a growth in the production of mortgage protection insurances, the most important product in the product range of BNP Paribas Cardif. A research carried out by the AFM in 2015 shows that the majority of homeowners are at risk in the event of disability and/or unemployment and it appears that approximately 10% insure themselves against those risks. An important reason for this is the ban on commission, introduced in 2013 for, among other things, mortgage protection insurances. Since that year commission is no longer part of the premium and spread over the entire term of the insurance, but the customer has to pay a fee at once to the advisor. And many customers are not willing or capable of paying these relatively high costs at once. Because of this development BNP Paribas Cardif Nederland introduced the Hypotheek Aflos Verzekering 6 in early 2017. An innovative, easy to explain insurance policy that will pay off the top of the mortgage in the event of disability and will pay an amount of up to twelve months in the event of unemployment.The Supervisory Board was actively informed during the regular meetings by the Executive Committee about the introduction of the Hypotheek Aflos Verzekering. In the coming years, the Supervisory Board will continue to monitor the introduction of a new generation of payment protection products and provide advice where necessary. The strategy initiated